introducing a “sandbox financial market infrastructure” that will allow businesses to experiment and innovate, establishment of a Cryptoasset Engagement Team for closer cooperation with the industry, explore ways to strengthen the competitiveness of the UK tax system to encourage the further development of the cryptocurrency market, and we work with Royal Mint on a Non-Fungible Token (NFT) this summer as an emblem of the future approach that the UK is determined to follow
Chancellor of the Exchequer Rishi Sunak said: It is my ambition to make the United Kingdom a global hub for cryptocurrency technology and the measures we have outlined today will help ensure that companies can invest, innovate and expand in this country. We want to see tomorrow’s businesses – and the jobs they create – here in the UK, and by effectively regulating we can give them the confidence they need to think and invest in the long run. This is part of our plan to ensure that the UK financial services industry is always at the forefront of technology and innovation. Stablecoins are a form of cryptocurrency that are usually pegged to a fiat currency such as the dollar and are intended to maintain a fixed value. With the right regulation, they could provide a more efficient means of payment and broaden consumer choices. The government intends to legislate to bring stablecoins – where they are used as a means of payment – within the regulatory payment range, creating conditions for stablecoin issuers and service providers to operate and invest in the UK. By recognizing the potential of this technology and regulating it now, the government can ensure financial stability and high regulatory standards so that these new technologies can ultimately be used reliably and safely. The UK’s vision of becoming a global hub for cryptocurrency technology was presented in a speech by Treasury Secretary John Glen at the Innovate Finance Global Summit today. It also announced that the United Kingdom would proactively investigate the potential transformational benefits of Distributed Accounting Technology (DLT) in the UK financial markets, which enable decentralized synchronization and data sharing to achieve potentially greater transparency and efficiency. . The government will legislate to create a “Sandbox” financial market infrastructure (FMI) that will allow companies to experiment and innovate in providing infrastructure services that support markets, in particular by testing distributed accounting technology. The government has further confirmed that it will launch a research program to investigate the feasibility and potential benefits of using DLT for government debt securities. John Glenn also confirmed that the government will consult on a wider regulation of the cryptocurrency sector later this year. Other measures include:
The UK Government will explore ways to strengthen the competitiveness of the UK tax system to encourage the further development of the cryptocurrency market in the UK. It will look at how DeFi loans are taxed – where cryptocurrency lenders repay them. The government will also consult on extending the scope of the Investment Manager Exemption to include cryptocurrencies. The Chancellor commissioned the Royal Mint to create an Irreplaceable Token this summer. The Financial Conduct Authority will hold a two-day “CryptoSprint” in May with industry participants, seeking industry-specific views on key issues related to the development of a future cryptosystem status. The CFO will set up and chair a Cryptoasset Engagement Team, convening key players from regulators and industry to advise the government on issues facing the cryptocurrency sector.
In his speech at the Mansion House in July 2021, the Chancellor outlined his vision for the future of the financial services sector, which included a plan to ensure the UK remains at the forefront of technology and innovation. This was one of the four key elements of this vision, with the ultimate goal of building a financial services sector that will continue to be one that the rest of the world is looking at. The government launched a consultation on cryptocurrencies and fixed currencies last year and today released its response setting out the next steps.
